A.O. Smith Harvestore Products Inc. v. Kallsen

In A.O. Smith Harvestore Products, Inc. v. Kallsen, No. 86CA0729 (Colo. App. Aug. 11, 1986) (not selected for official publication),
the Colorado Court of Appeals affirmed a judgment entered on a jury verdict in favor of plaintiffs, Richard A. Kallsen and
Carol Kallsen, and against defendant, A.O. Smith Harvestore Products, Inc. (AOSHPI), on claims of negligence and negligent
misrepresentation arising from the Kallsens' purchase of two AOSHPI grain storage systems from Big Horn Harvestore (Big Horn).1
The Court of Appeals held, inter alia, that the negligence claim was not barred by an exclusivity of remedy clause contained
in the applicable sales agreement, that the negligent misrepresentation claim was not barred by a non-reliance clause contained
in that agreement, and that the record contained sufficient evidence to support a portion of the jury's award of damages.
We granted a petition for certiorari filed by AOSHPI requesting review of the following issues: (1) whether the non-reliance
clause of the sales agreement bars the Kallsens from asserting a claim of negligent misrepresentation against AOSHPI; (2)
whether in the circumstances of this case application of the doctrine of economic loss requires reversal of the jury verdict
sustaining the Kallsens' negligence claim against AOSHPI; and (3) whether the jury verdict sustaining the Kallsens' negligent
misrepresentation claim against AOSHPI based upon section 552 of the Restatement (Second) of Torts (1965) must be reversed
because the evidence does not establish that AOSHPI was in the business of supplying information to others. In Keller v. A.O. Smith Harvestore Products, Inc., 819 P.2d 69 (1991), a case involving responses to questions certified
to this court by the United States Court of Appeals for the Tenth Circuit, we held that non-reliance clauses identical to
the non-reliance clause at issue here did not bar a buyer from recovering damages against a manufacturer on a claim of negligent
misrepresentation. On the basis of that decision, and the authorities relied upon therein, we conclude that the Court of Appeals
correctly determined that the Kallsens' negligent misrepresentation claim against AOSHPI was not barred by the non-reliance
clause of the sales agreement.